In the early
years of U.S. broadcasting it did not take long for advertising
agencies to embrace new media. Fortunately for advertisers, the
ability to reach a mass audience with radio intersected with an
expansion of the American economy in the 1920s. The techniques of
mass production championed by Henry Ford, the rise of Taylorism,
and an increase in disposable income in the years following World
War I sustained an ideology of consumption that advertising both
reflected and nurtured. NBC President Merlin H. Aylesworth proclaimed
that radio was "an open gateway to national markets, to millions
of consumers, and to thousands upon thousands of retailers."
The vision of
eager consumers gathered around this remarkable appliance was irresistible
to potential sponsors. The expansion of commercial broadcasting
came with such astonishing speed that by 1931 radio was an enormous
industry, accounting for $36 million in time sales on the networks
alone. Larger agencies such as N.W. Ayer, BBDO, and J. Walter Thompson
set up broadcasting departments and actively encouraged clients
to pursue the medium.
of radio as an economic force was reflected in a crucial change
regarding program development at the agency level. Through the 1920s
most commercial programming originated with networks and/or local
stations, with the agency serving as broker, casting about for clients
willing to purchase the rights to a broadcaster-produced show. By
the early 1930s, however, the agencies had reversed the equation--they
were developing shows in-house for clients, then purchasing air
time from the broadcasters. The key function for the agency thus
became to analyze a client's particular needs and design an entire
program around it, an enormously complex and financially risky undertaking,
yet one in which Madison Avenue was entirely successful. By the
end of the 1930s, agencies produced more than 80% of all network
With the advent
of commercial television in 1946, there was considerable sentiment
within the networks that program creation and execution would best
be left in their hands, although the personnel demands and expense
of video production made it impossible for any network to produce
all its programming in-house. Thus, as in radio, agencies assumed
a major role in the evolution of the television schedule. There
was not, however, a wholesale rush of sponsors begging to enter
the medium, and the networks were compelled to offer time slots
at bargain rates to attract customers. Companies such as Thompson
and Young & Rubicam had already developed some television expertise,
but the vast majority of agencies found themselves at the bottom
of a very steep learning curve. Still, Madison Avenue produced some
of the most enduring programs of the "Golden Age" of television,
including Texaco Star Theater, Kraft Television Theatre,
and The Goldbergs.
As more stations
began operation--particularly after 1952--the cost of purchasing
air time on the networks and local stations increased dramatically,
as did production budgets. Most agencies accepted as an economic
fact that they could no longer afford to create and produce their
own shows as they had in radio, and the recognition on Madison Avenue
that complete control of television production was unprofitable
to the agencies themselves contributed to the evolution in programming
hegemony away from the agencies to the networks. Thus, agencies
never assumed the kind of production control in television they
enjoyed in radio; they could never put into play the same economies
of scale as the networks and independent producers. The 15% commission
that served as the source of agency revenue simply was not enough
to cover the ever-increasing expenses associated with television
production. Many agencies subsequently shifted their emphasis to
the production of commercial spots, while others moved aggressively
into syndication, forming partnerships with Hollywood producers
to create filmed series that could be sold to a variety of sponsors.
costs rose during the 1950s, the gap between agency income and expenses
narrowed considerably, forcing a reconsideration of organizational
structure, leading to the emergence of what was termed the "all-media
strategy," which remains the dominant paradigm. Most agencies had
relied on specialists in a strict division of labor such that a
client's advertising might be divided up between three or four different
departments. The all-media approach rejected this diffusion of responsibility,
placing a single person or team in charge of a client's overall
needs. By eliminating specialists and fostering cooperation between
divisions, agencies could streamline personnel, coordinate functions,
improve efficiency and thereby reduce overhead.
agencies had an agenda distinct from that of their clients. Although
publicly they represented the clients' interests, many Madison Avenue
executives also promoted network control of programming in the trade
press. Because of their concerns over the increasing costs and complexities
of program production, and their frustration with mediating disputes
between advertisers and networks, many hoped television would not
continue the radio model of sponsor ownership of time slots. Concerned
that the expense of television programming far outstripped that
of radio production, agency executives sought ways to develop television
as a mass advertising medium while also seeking to avoid draining
agency revenues with television program costs. In this sense, the
evolution of the all-media strategy is illustrative of how the economic
pressures brought to bear on agencies during the 1950s changed the
way Madison Avenue approached programming, from an advertising vehicle
to one (albeit primary) component of a marketing plan.
the advertising agency is primarily responsible for the production
of commercial spots as well as the purchasing of air time on behalf
of clients. The situation has become murkier in recent years, however,
as some large companies (Coca-Cola, for example) have begun producing
much of their own advertising in-house, bypassing Madison Avenue.
Further, the networks now frequently approach potential advertisers
directly rather than going through the client's agency. In an era
when even large shops such as Chiat/Day are acquired by enormous
multinational holding companies, the role of the agency is now focused
more on using powers of persuasion in many different media than
merely in creating a single great advertisement.
Clark M., and Neil O'Brien. Television Advertising. New York:
Michele. Hollywood and Broadcasting: From Radio to Cable.
Urbana: University of Illinois Press, 1991.
T. Jackson. Fables of Abundance: A Cultural History of Advertising
in America. New York: Basic Books, 1994.
McAllister, Matthew P. The Commercialization of American Culture:
New Advertising, Control, and Democracy. Thousand Oaks, California:
Sage Publications, 1996.
Harry W. The Television Commercial: How to Create and Produce
Effective TV Advertising. New York: Hastings House, 1954.
Irving, and Norman Glenn. Television Advertising and Production
Handbook. New York: Thomas Y. Cromwell, 1953.